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Larger retailers have been outperforming smaller ones since the cost-of-living crisis began, helped by their ability to better absorb price rises, according to the BRC’s Q4 2022 Quarterly Economic Briefing.
Sales growth is projected to slow down to between 1.0 per cent and 2.3 per cent in the first half of the year, before picking up to between 2.6 per cent and 4.7 per cent in H2 2023, as per the BRC. Retail sales growth (by value) rose again in the fourth quarter, however, this is largely reflective of higher prices, as volume growth was at -6.0 per cent.
The report further added that inflation in the UK rose again in the final quarter of 2022, however there are clear signs that this is now starting to ease. Energy prices particularly continue to be the fastest rising part of inflation. Historically low levels of consumer confidence and 30-year high inflation have made for a very difficult year for both retailers and consumers.
Moreover, footfall continued its slow recovery to pre-pandemic levels in Q4 2022, with particularly strong showing over the Christmas period, despite rail strikes. Retail parks showed the biggest improvement from -9.1 per cent to -4.4 per cent (vs pre-pandemic levels), while other locations showed only a slight improvement.
Throughout the year, footfall has had a mostly steady recovery, though it has struggled to break past 10 per cent below pre-pandemic levels. This new reality of lower footfall reflects the long-term change in shopping behaviours. Online shopping remains higher than before the pandemic, and basket sizes for in-store shops appear to have grown, reducing the number of shopping visits.
Fibre2Fashion News Desk (NB)
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